Climate change - the POLITICAL debate. Vol 2
Discussion
t Sherlockhttp://www.bbc.co.uk/news/business-29324760
National Grid to pay firms to use less power
National Grid says it has signed deals with companies including Tata Steel and Flexitricity to pay them for using less electricity at peak times.
The firm, which runs Britain's supply network, said the arrangement would give it "the tools it needs to balance the power grid".
The arrangement will apply between 16:00 and 20:00 on weekday evenings between November and February.
Unexpected plant shutdowns have raised fears of potential energy shortages.
National Grid said it had contracted 319MW of what it called "Demand Side Balancing Reserve" at 431 individual sites across the UK.
If called upon, the firms will reduce their power demand or switch to their own generators. In return, they will receive compensation payments.
Earlier this month, National Grid said it was accelerating an emergency plan asking providers how much more electricity they could provide to fill a possible shortfall, following a series of power plant problems.
In June, National Grid had said the plan would not be needed this year.
But since then, fires at E.On's Ironbridge and SSE's Ferrybridge power plants, as well as precautionary checks at EDF Energy's Heysham and Hartlepool nuclear plants, have changed the outlook.
The UK is facing a reduction in electricity generation as old plants shut and new ones are slow to start up.
National Grid to pay firms to use less power
National Grid says it has signed deals with companies including Tata Steel and Flexitricity to pay them for using less electricity at peak times.
The firm, which runs Britain's supply network, said the arrangement would give it "the tools it needs to balance the power grid".
The arrangement will apply between 16:00 and 20:00 on weekday evenings between November and February.
Unexpected plant shutdowns have raised fears of potential energy shortages.
National Grid said it had contracted 319MW of what it called "Demand Side Balancing Reserve" at 431 individual sites across the UK.
If called upon, the firms will reduce their power demand or switch to their own generators. In return, they will receive compensation payments.
Earlier this month, National Grid said it was accelerating an emergency plan asking providers how much more electricity they could provide to fill a possible shortfall, following a series of power plant problems.
In June, National Grid had said the plan would not be needed this year.
But since then, fires at E.On's Ironbridge and SSE's Ferrybridge power plants, as well as precautionary checks at EDF Energy's Heysham and Hartlepool nuclear plants, have changed the outlook.
The UK is facing a reduction in electricity generation as old plants shut and new ones are slow to start up.
I think that more people than ever are now realising what absolute folly this climate change agenda is - and how much it's costing, both in jobs and prosperity:
German Green’s Anti-Nuclear Policies Boost Emissions
Germany will miss its 2022 climate targets for greenhouse-gas emissions from power plants as the country’s use of coal surges. Last year the coal-generated share of electricity hit the highest in 24 years.
The country also opened more new coal-fired power plants in 2013 than any other time in the past 20 years as it moves to stop the lights going out and shut down all nuclear power stations by 2022. Germany’s “Energiewende” green revolution has so far cost over €100 billion for consumers. “Despite the massive expansion of renewable energies, achieving key targets for the energy transition and climate protection by 2020 is no longer realistic,” Thomas Vahlenkamp, a wonk at McKinsey admitted to Bloomberg.
The whole green climate change racket is falling apart – global warming has stopped and now the hippies are coming up with new theories to justify global cooling. At the UN Climate Summit yesterday the Chinese and Indian’s basically called the West’s bluff and said sod it, we want prosperity. UKIP campaigns against windmill subsidies and years after the daft hug-a-husky days, Populus found this month that 71% of Conservative MPs think “it has not yet been conclusively proved that climate change is man made”. Green crap – nein danke…http://order-order.com/2014/09/25/german-green-anti-nuclear-policies-boost-emissions/
Guido Fawkes said:
German Green’s Anti-Nuclear Policies Boost Emissions
Germany will miss its 2022 climate targets for greenhouse-gas emissions from power plants as the country’s use of coal surges. Last year the coal-generated share of electricity hit the highest in 24 years.
The country also opened more new coal-fired power plants in 2013 than any other time in the past 20 years as it moves to stop the lights going out and shut down all nuclear power stations by 2022. Germany’s “Energiewende” green revolution has so far cost over €100 billion for consumers. “Despite the massive expansion of renewable energies, achieving key targets for the energy transition and climate protection by 2020 is no longer realistic,” Thomas Vahlenkamp, a wonk at McKinsey admitted to Bloomberg.
The whole green climate change racket is falling apart – global warming has stopped and now the hippies are coming up with new theories to justify global cooling. At the UN Climate Summit yesterday the Chinese and Indian’s basically called the West’s bluff and said sod it, we want prosperity. UKIP campaigns against windmill subsidies and years after the daft hug-a-husky days, Populus found this month that 71% of Conservative MPs think “it has not yet been conclusively proved that climate change is man made”. Green crap – nein danke…
Jasandjules said:
"At the UN Climate Summit yesterday the Chinese and Indian’s basically called the West’s bluff and said sod it, we want prosperity"
Yet on the news I heard that China had agreed to massive reductions.. MSM being somewhat lax with the truth?
What do you think? Shukman was on BBC news the other night with that footage from the Antarctic of the big chunks of ice falling into the sea whilst telling us that Arctic sea is still melting. Then there was the usual 'sea levels rising' before going on about the massive increases in CO2 emissions yet strangely no mention of the lack of warming.Yet on the news I heard that China had agreed to massive reductions.. MSM being somewhat lax with the truth?
The BBC at the very least are now utterly shameless when it comes to pushing the propaganda. There is absolutely no pretence and I really wish somebody in authority would hold them to account over the amount of misreporting.
One of the recurring themes of the AGW hypothesis is that the risks to life, limb and finances associated with storms and natural disasters will increase significantly in lone with, presumably, rising CO2 levels. Also that this risk is clearly evident in weather events, notably some large storms in the USA.
The Lloyds Insurance business in London has just released their interim report for 2014 and if includes some observations about how things are going.
"In terms of claims, the first half of this year has been a relatively benign
period for major catastrophes. The most notable claims have arisen from
the unusually high incidence of aviation losses, which have been sudden
and tragic."
http://www.lloyds.com/~/media/files/lloyds/investo...
Well, it's only 6 months and we all know that anything related to assessing risk for insurance purposes must almost certainly take a longer view than 6 months ... but nevertheless one might have expected to see some comments about the unpredictable problems of increasing risk associated with natural disasters caused by human instigated CO2 based GW.
But is seems not - even though it would presumably be a good excuse for proposing premium increases.
Have they missed a trick? Or is the linkage so tenuous that even the insurance industry does not care to make the case?
The Lloyds Insurance business in London has just released their interim report for 2014 and if includes some observations about how things are going.
"In terms of claims, the first half of this year has been a relatively benign
period for major catastrophes. The most notable claims have arisen from
the unusually high incidence of aviation losses, which have been sudden
and tragic."
http://www.lloyds.com/~/media/files/lloyds/investo...
Well, it's only 6 months and we all know that anything related to assessing risk for insurance purposes must almost certainly take a longer view than 6 months ... but nevertheless one might have expected to see some comments about the unpredictable problems of increasing risk associated with natural disasters caused by human instigated CO2 based GW.
But is seems not - even though it would presumably be a good excuse for proposing premium increases.
Have they missed a trick? Or is the linkage so tenuous that even the insurance industry does not care to make the case?
You have to remember that insurance is pretty much done on an annual basis so longer-term projections of what might happen to risks isn't that much of an issue for them. As far as I understand it, their calculations of premiums are based on current risk levels which would include an estimation of the likelihood of an event over the period being insured and the associated consequences. This is done on the basis of available data on the risks (including measured and modelled info on probability of storm/flood damage, claims data etc). Their interest in future risks is probably only related to the future viability of particular markets they may be involved in and even then they may not be that interested in changes over a 25 + year time frame.
That said, some insurers do seem to take the issue pretty seriously:
http://www.zurich.co.uk/corporateresponsibility/en...
as well as the industry as a whole:
https://www.abi.org.uk/News/Publications/2012/June...
That said, some insurers do seem to take the issue pretty seriously:
http://www.zurich.co.uk/corporateresponsibility/en...
as well as the industry as a whole:
https://www.abi.org.uk/News/Publications/2012/June...
Lotus 50 said:
You have to remember that insurance is pretty much done on an annual basis so longer-term projections of what might happen to risks isn't that much of an issue for them. As far as I understand it, their calculations of premiums are based on current risk levels which would include an estimation of the likelihood of an event over the period being insured and the associated consequences. This is done on the basis of available data on the risks (including measured and modelled info on probability of storm/flood damage, claims data etc). Their interest in future risks is probably only related to the future viability of particular markets they may be involved in and even then they may not be that interested in changes over a 25 + year time frame.
That said, some insurers do seem to take the issue pretty seriously:
http://www.zurich.co.uk/corporateresponsibility/en...
as well as the industry as a whole:
https://www.abi.org.uk/News/Publications/2012/June...
Yep, right. Of course.That said, some insurers do seem to take the issue pretty seriously:
http://www.zurich.co.uk/corporateresponsibility/en...
as well as the industry as a whole:
https://www.abi.org.uk/News/Publications/2012/June...
The old use term "weasel words" seems so outdated these days when they are the only words used.
If you are familiar with the reports offered on the pages for which you supplied the links could you point out the sections where they propose precisely how they and their partners/customers will make a measurable and identifiable difference to 'Climate' and also how they will know, without doubt, when they have done so.
Do they have potential clients hammering on their doors demanding cover for their long term projects that takes into account the disasters that will befall them according to future predictions?
Or are they just scoring a few Brownie points to help their management with gong seeking and in the hope that they will count for something next time the politicians decide to deflect their own incompetencies by "fining" financial organisations for "malpractice" thereby diminishing the bonus pot for management largesse?
Will insurance charges for "Climate Change" protection policies be free of risk of PPI style compensation risk if they have worked with the government of the day to promote the concept amongst the plebian masses?
No matter, my point was not so much that they have, apparently, avoided having to cough up for notable disasters for a few months so much as that they are not clamouring to push ever greater future fears related to "Climate Change" and the psychological agenda that do so would suggest. Compare that with the contents of the pages for which you provided the links (and presumably the contents of the linked reports). Are they just taking a breather from pushing the agenda, perhaps fearing that people are weary of the subject? Or do they now feel the message is so ingrained that they don't actually need to keep pushing it as it has a life of its own?
This is an industry that lives only by promoting risk in one form or another. The statement I quoted seems to suggest that someone may have missed yet another opportunity to purvey some platitudes to reinforce the message. I find that vaguely interesting.
ETA:
Actually the final paragraph of the abi page blurb probably tells us the most about where they are pushing things.
"As a trade association public policy is a priority for us so, as always, we are especially strong on principle 2 – ‘Inform Public Policy Making’. This year, however, has been even more focussed on influencing public policy than previous years. Safeguarding flood insurance after the Statement of Principles expires in 2013 is one of the ABI’s fourteen ‘principal issues’ and much of our and resources has been focused on this area. It is an area of vital importance to the industry now and, given the climate risks ahead, of even greater significance in the long-term."
Guaranteeing the continuance of a major market and future opportunity would be a natural objective for a trade association.
So, did they succeed in getting and extension from 2013?
Edited by LongQ on Sunday 28th September 02:12
Not sure how to respond to your reply (LongQ), who are you accusing of using weasel words?
Regardless, if you look at the 2014 Climatewise report (the first pdf on the Zurich page I linked to above), it sets out exactly what they are doing. To me the actions go beyond seeking to score brownie points - although they clearly see benefits to their reputation.
Thinking about your question about clients looking for long-term insurance to cover future risks, the simple answer is I don't know for certain, but I suspect not. Most property insurance is done on an annual basis using current risks to determine premiums/excesses as I said above so climate change doesn't come into it much. I doubt there would be much of a market for insurance against future climate change, people don't know how long they will own a property so why would they want to insure it for the next 25, 50, 100 years? Even if they did, I'd anticipate that insurers would include an element for future changes to risk, I'd also expect the insurance to be expensive if anyone was willing to provide cover. As to whether or not they would be subject to PPI type claims, I guess that would depend on the information used to assess the risks when the policy was sold. If it was independent and could be shown to have been the best available info at the time I'd suspect not.
As for the industry forgetting to push/taking a breather from pushing the agenda, I don't know but I'd suspect the former or they think it's taken as read (they don't seem shy of pushing it in other places!).
The Statement of Principles is an agreement between the industry and Government whereby insurers that are members of the ABI agree to continue to provide cover for flood damage as a routine part of household insurance. If I remember correctly it basically said that they will do this as long as the Government continues to invest in flood risk management to ensure that risks are managed to an acceptable level. The Government and Defra are currently working with the ABI to establish an alternative to this called Flood Re (a scheme that aims to keep the cost of insuring properties with high flood risk to reasonable levels by re-insuring the insurers providing the cover against flood risk). I'm not sure whether or not the Statement of Principles is still in place - I suspect not although they may have agreed to keep it going until Flood Re is set up... and yes you're right in that the ABI/Insurers are keen to maintain a future market but most of this is about making sure that the risks to the insurers aren't too big and that people can afford to buy insurance against flood damage.
Regardless, if you look at the 2014 Climatewise report (the first pdf on the Zurich page I linked to above), it sets out exactly what they are doing. To me the actions go beyond seeking to score brownie points - although they clearly see benefits to their reputation.
Thinking about your question about clients looking for long-term insurance to cover future risks, the simple answer is I don't know for certain, but I suspect not. Most property insurance is done on an annual basis using current risks to determine premiums/excesses as I said above so climate change doesn't come into it much. I doubt there would be much of a market for insurance against future climate change, people don't know how long they will own a property so why would they want to insure it for the next 25, 50, 100 years? Even if they did, I'd anticipate that insurers would include an element for future changes to risk, I'd also expect the insurance to be expensive if anyone was willing to provide cover. As to whether or not they would be subject to PPI type claims, I guess that would depend on the information used to assess the risks when the policy was sold. If it was independent and could be shown to have been the best available info at the time I'd suspect not.
As for the industry forgetting to push/taking a breather from pushing the agenda, I don't know but I'd suspect the former or they think it's taken as read (they don't seem shy of pushing it in other places!).
The Statement of Principles is an agreement between the industry and Government whereby insurers that are members of the ABI agree to continue to provide cover for flood damage as a routine part of household insurance. If I remember correctly it basically said that they will do this as long as the Government continues to invest in flood risk management to ensure that risks are managed to an acceptable level. The Government and Defra are currently working with the ABI to establish an alternative to this called Flood Re (a scheme that aims to keep the cost of insuring properties with high flood risk to reasonable levels by re-insuring the insurers providing the cover against flood risk). I'm not sure whether or not the Statement of Principles is still in place - I suspect not although they may have agreed to keep it going until Flood Re is set up... and yes you're right in that the ABI/Insurers are keen to maintain a future market but most of this is about making sure that the risks to the insurers aren't too big and that people can afford to buy insurance against flood damage.
Edited by Lotus 50 on Sunday 28th September 12:10
Which is all fine but there's no human (tax gas) signal in flooding or flood losses. J. I. Barredo who is well known in the PH parish published a paper a few years ago: "Normalized Flood Losses in Europe: 1970-2006" in the journal Natural Hazards and Earth System Sciences. The study looked at a climatically relevant period, 37 years, and after assessing the position across 31 European countries the results showed no detectable sign of human-induced climate change in normalised flood losses.
Since then we had the 2007 UK flooding which the Centre for Hydrology and Ecology correctly diagnosed as due to a slow moving depression not V8s. An article around the time said "A new scientific study of the wet summer of 2007 confirms that the floods were a very singular event and does not support the idea that the exceptional river flooding was linked to climate change. This conclusion is contained within a comprehensive hydrological appraisal of the summer 2007 floods carried out by scientists from the Centre for Ecology & Hydrology".
The more recent Somerset event was due to a chaotic jet stream shift in the opposite direction to that predicted by the new religion and was also nothing to do with tax gas. A recent ish paper in Nature Geoscience on Hurricanes idicated tropical storms will become less frequent by the end of the century as a result of climate change, presumably this refers to the non-existent warming we're experiencing.
Allegedly losses are occurring on a more costly scale because people are adopting the Al Gore model and building more examples of more expensive homes and business premises full of costly kit near coastlines and rivers which are susceptible to natural not manmade events (lack of dredging of UK rivers apart).
What the Insurance industry says and does, whatever that may be, is going to be in tne interest of the insurance industry and the parallel interest of keeping duped politicians sweet.
Since then we had the 2007 UK flooding which the Centre for Hydrology and Ecology correctly diagnosed as due to a slow moving depression not V8s. An article around the time said "A new scientific study of the wet summer of 2007 confirms that the floods were a very singular event and does not support the idea that the exceptional river flooding was linked to climate change. This conclusion is contained within a comprehensive hydrological appraisal of the summer 2007 floods carried out by scientists from the Centre for Ecology & Hydrology".
The more recent Somerset event was due to a chaotic jet stream shift in the opposite direction to that predicted by the new religion and was also nothing to do with tax gas. A recent ish paper in Nature Geoscience on Hurricanes idicated tropical storms will become less frequent by the end of the century as a result of climate change, presumably this refers to the non-existent warming we're experiencing.
Allegedly losses are occurring on a more costly scale because people are adopting the Al Gore model and building more examples of more expensive homes and business premises full of costly kit near coastlines and rivers which are susceptible to natural not manmade events (lack of dredging of UK rivers apart).
What the Insurance industry says and does, whatever that may be, is going to be in tne interest of the insurance industry and the parallel interest of keeping duped politicians sweet.
Lotus 50 said:
Not sure how to respond to your reply (LongQ), who are you accusing of using weasel words?
Not you of course! It's an industry thing. Everything seems to have gone downhill (IMO) since "Mission Statements" became the expected norm for companies to try to explain what they thought they were about.Lotus 50 said:
Regardless, if you look at the 2014 Climatewise report (the first pdf on the Zurich page I linked to above), it sets out exactly what they are doing. To me the actions go beyond seeking to score brownie points - although they clearly see benefits to their reputation.
Thinking about your question about clients looking for long-term insurance to cover future risks, the simple answer is I don't know for certain, but I suspect not. Most property insurance is done on an annual basis using current risks to determine premiums/excesses as I said above so climate change doesn't come into it much. I doubt there would be much of a market for insurance against future climate change, people don't know how long they will own a property so why would they want to insure it for the next 25, 50, 100 years? Even if they did, I'd anticipate that insurers would include an element for future changes to risk, I'd also expect the insurance to be expensive if anyone was willing to provide cover. As to whether or not they would be subject to PPI type claims, I guess that would depend on the information used to assess the risks when the policy was sold. If it was independent and could be shown to have been the best available info at the time I'd suspect not.
We tend to think in short term policies because they affect our daily lives but industry and major infrastructure projects may need to think further ahead. The "Contract" renewal point of an insurance policy is an opportunity for both party to reconsider their needs and options and position. The problem with and Climate Change considerations is that they are attempting to predict the unknown with the likelihood of unattributable risk. Thinking about your question about clients looking for long-term insurance to cover future risks, the simple answer is I don't know for certain, but I suspect not. Most property insurance is done on an annual basis using current risks to determine premiums/excesses as I said above so climate change doesn't come into it much. I doubt there would be much of a market for insurance against future climate change, people don't know how long they will own a property so why would they want to insure it for the next 25, 50, 100 years? Even if they did, I'd anticipate that insurers would include an element for future changes to risk, I'd also expect the insurance to be expensive if anyone was willing to provide cover. As to whether or not they would be subject to PPI type claims, I guess that would depend on the information used to assess the risks when the policy was sold. If it was independent and could be shown to have been the best available info at the time I'd suspect not.
So you have a property that gets a "once in a 100 year" flood twice in 10 years, attribute the cause to the additional risks of Climate Change, increase the policy to levels the existing owner cannot afford (at the same time making the property worthless in the market) and then sit back and see what happens. If the nature of the property "deal" requires that risk insurance be in place someone get seriously stuffed even though the once in 100 years problem may not occur for another 200 years.
However if, for the sake of argument, one has already spent a few billion quid on building a Power station or an HS2 or some other major project and suddenly the peripheral costs of the project - such as the insurance for all the participants who cannot just tap up the tax payer - escalated dramatically on the basis of some newly perceived but unproven potential risk the knock on effects may be more widespread.
Now in terms of risk management the upfront costs may be the only way to do business but it would not be unreasonable to have a clause that ensures that the addition risk element of the cost is placed in escrow of some sort so that, in then event of no claims be made against problems of theoretical risk that do not materialise, the amounts set aside can be redistributed as cash back. Sort of like the Motoring policy No Claims Bonus concept. Of course, just as with the NCB, keeping to the spirit of the concept and convincing everyone that it is fair may be a challenge too far.
Moreover changes in policy charges on an annual basis are based (or so it seems) mostly claims records rather than real risk monitoring. So the system is open to being gamed on both sides.
If any insurance companies are looking at their markets with an eye on risk minimisation advice for their customers and nothing more I would be amazed but delighted. They might start by refusing insurance for any property development taking place on a known or planned flood plain. That would send a message to the market and the planner and so help to minimise the disastrous affects of flooding "caused by Climate Change" that are really attributable to either stupidity or greed.
Lotus 50 said:
As for the industry forgetting to push/taking a breather from pushing the agenda, I don't know but I'd suspect the former or they think it's taken as read (they don't seem shy of pushing it in other places!).
The Statement of Principles is an agreement between the industry and Government whereby insurers that are members of the ABI agree to continue to provide cover for flood damage as a routine part of household insurance. If I remember correctly it basically said that they will do this as long as the Government continues to invest in flood risk management to ensure that risks are managed to an acceptable level. The Government and Defra are currently working with the ABI to establish an alternative to this called Flood Re (a scheme that aims to keep the cost of insuring properties with high flood risk to reasonable levels by re-insuring the insurers providing the cover against flood risk). I'm not sure whether or not the Statement of Principles is still in place - I suspect not although they may have agreed to keep it going until Flood Re is set up... and yes you're right in that the ABI/Insurers are keen to maintain a future market but most of this is about making sure that the risks to the insurers aren't too big and that people can afford to buy insurance against flood damage.
See my somewhat generic comments above.The Statement of Principles is an agreement between the industry and Government whereby insurers that are members of the ABI agree to continue to provide cover for flood damage as a routine part of household insurance. If I remember correctly it basically said that they will do this as long as the Government continues to invest in flood risk management to ensure that risks are managed to an acceptable level. The Government and Defra are currently working with the ABI to establish an alternative to this called Flood Re (a scheme that aims to keep the cost of insuring properties with high flood risk to reasonable levels by re-insuring the insurers providing the cover against flood risk). I'm not sure whether or not the Statement of Principles is still in place - I suspect not although they may have agreed to keep it going until Flood Re is set up... and yes you're right in that the ABI/Insurers are keen to maintain a future market but most of this is about making sure that the risks to the insurers aren't too big and that people can afford to buy insurance against flood damage.
The complexity of various industries varies enormously of course but I am always reminded of the comments of a wise person who pointed out to me one day that if one's business is about killing rats the most important aspect of it is to ensure that you never accidentally of intentionally eliminate all the available rats even if you know how to do so.
Being in some way part of the Climate Change movement offers the potential continually move your business model to the conceptual eradication of new chimera that allow the business to continue without any concerns about the availability of rats or any other meaningful measurable entity. Similar concepts have been around for centuries, on and off, but none that I have heard about have been so clearly susceptible to the sort of massive and apparently limitless taxation opportunities that the evolved CC meme offers those who wish to abuse it. Even taxation for Cold War military spending seems to be dwarfed in real money terms by the love in with CC in some quarters.
Edited by LongQ on Sunday 28th September 22:36
(Quote) We tend to think in short term policies because they affect our daily lives but industry and major infrastructure projects may need to think further ahead. The "Contract" renewal point of an insurance policy is an opportunity for both party to reconsider their needs and options and position. The problem with and Climate Change considerations is that they are attempting to predict the unknown with the likelihood of unattributable risk.
So you have a property that gets a "once in a 100 year" flood twice in 10 years, attribute the cause to the additional risks of Climate Change, increase the policy to levels the existing owner cannot afford (at the same time making the property worthless in the market) and then sit back and see what happens. If the nature of the property "deal" requires that risk insurance be in place someone get seriously stuffed even though the once in 100 years problem may not occur for another 200 years.(Quote)
Yes, but at present all the insurers don't attribute events to climate change - as Turbobloke has pointed out, people haven't yet demonstrated a specific link between a single event and climate change (although the frequency of extreme events at the moment may be such that if they continue as present a link might be demonstrable). Insurance for property is done in a similar way to cars and the premium and excesses are worked out on the basis of risk and claims history so what you've suggested above already happens without attributing anything to climate change. That said if you had the two floods then had a length of time with not claim, I guess your premiums/excess would reduce.
(Quote) However if, for the sake of argument, one has already spent a few billion quid on building a Power station or an HS2 or some other major project and suddenly the peripheral costs of the project - such as the insurance for all the participants who cannot just tap up the tax payer - escalated dramatically on the basis of some newly perceived but unproven potential risk the knock on effects may be more widespread. (Quote)
Yes but I think most major infrastructure items are actually self-insured by Govt (the cost of commercial insurance would be too big) and are most likely to have been designed to cope with the natural hazards they are likely to face. These design standards will often include an allowance for potential climate change impacts over the life of the structure - for example nuclear power stations in low-lying coastal areas will have their own flood defences that are designed to deal with very rare events (1:10000?). The pace of any potential climate change, and the fact that there are good networks of weather, river flow data, tide and wave gauges monitoring the situation mean that there would be time to increase the standard of protection for this type of infrastructure.
(Quote)Now in terms of risk management the upfront costs may be the only way to do business but it would not be unreasonable to have a clause that ensures that the addition risk element of the cost is placed in escrow of some sort so that, in then event of no claims be made against problems of theoretical risk that do not materialise, the amounts set aside can be redistributed as cash back. Sort of like the Motoring policy No Claims Bonus concept. Of course, just as with the NCB, keeping to the spirit of the concept and convincing everyone that it is fair may be a challenge too far.(Quote)
That's an interesting idea, cash back for no claims would be an interesting option if you wanted to and could come to such a long-term agreement with an insurer.
(Quote)Moreover changes in policy charges on an annual basis are based (or so it seems) mostly claims records rather than real risk monitoring. So the system is open to being gamed on both sides.
If any insurance companies are looking at their markets with an eye on risk minimisation advice for their customers and nothing more I would be amazed but delighted. They might start by refusing insurance for any property development taking place on a known or planned flood plain. That would send a message to the market and the planner and so help to minimise the disastrous affects of flooding "caused by Climate Change" that are really attributable to either stupidity or greed.(Quote)
There's definitely an element of both in the way policy charges are assessed but yes the system could be gamed. I don't think there's been a case of refusal to insure yet - but there certainly are cases where people have either had to pay massively high premiums or (more likely) excesses against particular types of event such as a flood that effectively mean they aren't insured (e.g. excesses in the order of £30-40k for flood damage) it's in their interests to promote some degree of risk minimisation but clearly they also want a market that they can work within. In the Flood Re scheme, houses in areas of high flood insurance risk (note the inclusion of the word insurance!) built after 2009 are excluded so the messages are there.
(Quote) See my somewhat generic comments above.
The complexity of various industries varies enormously of course but I am always reminded of the comments of a wise person who pointed out to me one day that if one's business is about killing rats the most important aspect of it is to ensure that you never accidentally of intentionally eliminate all the available rats even if you know how to do so.
Being in some way part of the Climate Change movement offers the potential continually move your business model to the conceptual eradication of new chimera that allow the business to continue without any concerns about the availability of rats or any other meaningful measurable entity. Similar concepts have been around for centuries, on and off, but none that I have heard about have been so clearly susceptible to the sort of massive and apparently limitless taxation opportunities that the evolved CC meme offers those who wish to abuse it. Even taxation for Cold War military spending seems to be dwarfed in real money terms by the love in with CC in some quarters.
(Quote)
I get what you mean but if human induced climate change is/does happen would it bring forward any new chimeras? The predictions are that it could bring weather events that are more extreme and more frequent. Given that we already have extreme weather from time to time and have infrastructure in place to manage the risks to a degree and monitor weather and weather impacts over time the probability of an event that is catastrophic at the national scale is extremely low. That said and for example, it's not possible to build defences/drains that stop all flooding and there will always be some residual risk that people will need to manage for themselves, either by doing something to reduce the impact of an event on their property or by insuring themselves against loss. So, I guess, the industry is lucky in the sense that they aren't in danger of killing all of the rats regardless of any changes in climate (whether natural or human induced). The sensible approach seems to me to build in sensible allowances for potential future changes in weather extremes and watch the situation carefully to make sure that the level of protection you're providing/giving yourself is still within acceptable limits. If it is then fine, you don't need to do anything more, if it isn't then you need to make sure you can do whatever you need to do before the increased risk bites you (I think the phrase is "adaptive management").
So you have a property that gets a "once in a 100 year" flood twice in 10 years, attribute the cause to the additional risks of Climate Change, increase the policy to levels the existing owner cannot afford (at the same time making the property worthless in the market) and then sit back and see what happens. If the nature of the property "deal" requires that risk insurance be in place someone get seriously stuffed even though the once in 100 years problem may not occur for another 200 years.(Quote)
Yes, but at present all the insurers don't attribute events to climate change - as Turbobloke has pointed out, people haven't yet demonstrated a specific link between a single event and climate change (although the frequency of extreme events at the moment may be such that if they continue as present a link might be demonstrable). Insurance for property is done in a similar way to cars and the premium and excesses are worked out on the basis of risk and claims history so what you've suggested above already happens without attributing anything to climate change. That said if you had the two floods then had a length of time with not claim, I guess your premiums/excess would reduce.
(Quote) However if, for the sake of argument, one has already spent a few billion quid on building a Power station or an HS2 or some other major project and suddenly the peripheral costs of the project - such as the insurance for all the participants who cannot just tap up the tax payer - escalated dramatically on the basis of some newly perceived but unproven potential risk the knock on effects may be more widespread. (Quote)
Yes but I think most major infrastructure items are actually self-insured by Govt (the cost of commercial insurance would be too big) and are most likely to have been designed to cope with the natural hazards they are likely to face. These design standards will often include an allowance for potential climate change impacts over the life of the structure - for example nuclear power stations in low-lying coastal areas will have their own flood defences that are designed to deal with very rare events (1:10000?). The pace of any potential climate change, and the fact that there are good networks of weather, river flow data, tide and wave gauges monitoring the situation mean that there would be time to increase the standard of protection for this type of infrastructure.
(Quote)Now in terms of risk management the upfront costs may be the only way to do business but it would not be unreasonable to have a clause that ensures that the addition risk element of the cost is placed in escrow of some sort so that, in then event of no claims be made against problems of theoretical risk that do not materialise, the amounts set aside can be redistributed as cash back. Sort of like the Motoring policy No Claims Bonus concept. Of course, just as with the NCB, keeping to the spirit of the concept and convincing everyone that it is fair may be a challenge too far.(Quote)
That's an interesting idea, cash back for no claims would be an interesting option if you wanted to and could come to such a long-term agreement with an insurer.
(Quote)Moreover changes in policy charges on an annual basis are based (or so it seems) mostly claims records rather than real risk monitoring. So the system is open to being gamed on both sides.
If any insurance companies are looking at their markets with an eye on risk minimisation advice for their customers and nothing more I would be amazed but delighted. They might start by refusing insurance for any property development taking place on a known or planned flood plain. That would send a message to the market and the planner and so help to minimise the disastrous affects of flooding "caused by Climate Change" that are really attributable to either stupidity or greed.(Quote)
There's definitely an element of both in the way policy charges are assessed but yes the system could be gamed. I don't think there's been a case of refusal to insure yet - but there certainly are cases where people have either had to pay massively high premiums or (more likely) excesses against particular types of event such as a flood that effectively mean they aren't insured (e.g. excesses in the order of £30-40k for flood damage) it's in their interests to promote some degree of risk minimisation but clearly they also want a market that they can work within. In the Flood Re scheme, houses in areas of high flood insurance risk (note the inclusion of the word insurance!) built after 2009 are excluded so the messages are there.
(Quote) See my somewhat generic comments above.
The complexity of various industries varies enormously of course but I am always reminded of the comments of a wise person who pointed out to me one day that if one's business is about killing rats the most important aspect of it is to ensure that you never accidentally of intentionally eliminate all the available rats even if you know how to do so.
Being in some way part of the Climate Change movement offers the potential continually move your business model to the conceptual eradication of new chimera that allow the business to continue without any concerns about the availability of rats or any other meaningful measurable entity. Similar concepts have been around for centuries, on and off, but none that I have heard about have been so clearly susceptible to the sort of massive and apparently limitless taxation opportunities that the evolved CC meme offers those who wish to abuse it. Even taxation for Cold War military spending seems to be dwarfed in real money terms by the love in with CC in some quarters.
(Quote)
I get what you mean but if human induced climate change is/does happen would it bring forward any new chimeras? The predictions are that it could bring weather events that are more extreme and more frequent. Given that we already have extreme weather from time to time and have infrastructure in place to manage the risks to a degree and monitor weather and weather impacts over time the probability of an event that is catastrophic at the national scale is extremely low. That said and for example, it's not possible to build defences/drains that stop all flooding and there will always be some residual risk that people will need to manage for themselves, either by doing something to reduce the impact of an event on their property or by insuring themselves against loss. So, I guess, the industry is lucky in the sense that they aren't in danger of killing all of the rats regardless of any changes in climate (whether natural or human induced). The sensible approach seems to me to build in sensible allowances for potential future changes in weather extremes and watch the situation carefully to make sure that the level of protection you're providing/giving yourself is still within acceptable limits. If it is then fine, you don't need to do anything more, if it isn't then you need to make sure you can do whatever you need to do before the increased risk bites you (I think the phrase is "adaptive management").
Edited by Lotus 50 on Sunday 28th September 18:40
Lotus 50 said:
...people haven't yet demonstrated a specific link between a single event and climate change (although the frequency of extreme events at the moment may be such that if they continue as present a link might be demonstrable)...
For info, there's no increasing trend / frequency in extreme weather events (e.g. hurricanes, storms, no human link to floods which do not exceed historical levels) and the global death toll is declining. See reports including lit surveys from Khandekar and Goklany in PH climate threads, and other studies, but I appreciate that such details may not be of interest.In a very short period of time (the last decade) there is some evidence that extreme cold weather events are increasing, but more data is needed to see if the planet is indeed heading into another Dalton or Maunder event - either way, cooling is the new warming as they say.
Carbon dioxide induced warming is about signals in global temperature or energy. There's no causal link to humans.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff